MikeTarsala

Stocks rose in high trading volume as bullish investors viewed the Fed's half-percent interest rate cut, as well as in-line earnings from bellwether IBM as reasons to jump back into the tech markets.

The next hurdle for technology markets is expected to be Microsoft, the highest-valued stock on the Nasdaq, which reports earnings after the close. The company, which represents about 3.5 percent of the Dow Jones Industrial Average, is under the gun to report earnings of 42 cents a share, or roughly $2.2 billion.

IBM shares rose 8 percent after the $200 billion company reported Wednesday that its strong services business helped it boost earnings 18 percent in the first quarter, while sales rose 9 percent vs. year-ago results. See full story.

"While many of our competitors who follow the dot-com mania are now trying to reinvent their strategies, IBM has emerged stronger than ever," said John Joyce, IBM's chief financial officer, in a conference call.

Joyce said the company is on track to post low-double-digit earnings growth in 2001, and high-single-digit sales growth over the previous year. He added that he's comfortable with the company's consensus earnings target for the year of $4.87 a share.

Still, problems persist. IBM can't demand high prices in the markets for personal computers and hard-disk drives. The company's revenue decreased year-over-year from its aging AS-400 computer line. And Big Blue isn't immune to a world economic downturn.

Apple Computer
AAPL, +0.42%
rose 13 percent following its earnings report. The company returned to the black, as net income in the quarter was $40 million, or 11 cents a share, minus non-recurring items, vs. $233 million, or 64 cents, reported in the year-ago period. Sales, however, fell 26 percent from the year-ago results. .See full story.

Xerox
XRX, +0.62%
shares surged 39 percent as one of the most actively traded issues on the New York Stock Exchange, after the struggling copier-and-printer company reported first-quarter results, adding that it expects to turn a profit by 2001. The company reported a narrower-than-expected loss of $86 million, or 12 cents per share, compared with an adjusted profit of $220 million, or 30 cents per share, in the year-ago quarter. See full story.

Software stocks rose ahead of Microsoft's results, and in the wake of Siebel Systems' earnings. Sales-software-maker Siebel, one of the only software companies not to warn about its first quarter, more than doubled its year-ago profit on the back of strong software licensing and services growth.

"We had a really spectacular performance last quarter, under the most adverse of economic conditions," said CEO Tom Siebel, during a conference call with analysts.

But blaming the economy, Siebel trimmed its software license growth expectations to a range of between 25 and 30 percent in 2001 -- far lower than analysts expected. The CEO said the company has taken cost-cutting steps to adjust for slower growth. Siebel recently announced it would cut about 3,000 jobs.

Networking stocks also participated in the day's gains, with Cisco and JDS Uniphase
JDSU
among the Nasdaq's most active issues on the rise. Shares of Lucent
LU
meanwhile surged 19 percent to $9.04 amid renewed rumors that it's close to selling its fiber-optic manufacturing unit to get more cash to pay off debt. The Amex Networking Index
$NWX
moved up 6.4 percent.

Chip stocks continued their run, as AMD's
AMD, +1.47%
shares gained $1.16 to $29.01. Chip stocks continue their strong run in recent weeks, as the 16-stock Philadelphia Semiconductor Index
SOX, -0.19%
is up 44 percent over the same period.

One of the most high-profile chip companies to report since Intel issued results Tuesday was Cypress Semiconductor
CY, -2.09%
. The company reported a first-quarter profit of 25 cents a share, 2 cents ahead of the lowered Wall Street expectations. But going forward, the company said it's forecasting a revenue decline of 20 to 24 percent in the second quarter. Shares climbed higher by 8 percent.

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